Out-Law News 2 min. read
31 Jul 2015, 10:20 am
A package of measures announced during US president Barack Obama’s four-day visit to Kenya and Ethiopia, which ended on 28 July, included an extra $1 billion commitment to the US-led Power Africa initiative up to 2018 by the US Overseas Private Investment Corporation (OPIC).
The White House said OPIC had now reached “critical milestones on four priority projects”, including commitments for two large wind projects in Kenya, and thermal power projects in Senegal and Ghana, “which are collectively expected to generate more than 700 MW of power”.
In addition, the White House said the US foreign aid agency, the Millennium Challenge Corporation, would sign a $375 million deal with Benin “aimed at transforming its power sector through policy reform, private sector participation in generation, and infrastructure investment”.
The Benin agreement will finance up to 78 megawatts (MW) of power generation capacity, which the US said is equivalent to one-third of national electricity demand, including 45 MW of utility-scale solar power, off-grid electrification distribution network improvements, and support for “Benin’s ambitious policy reform and institutional strengthening programme".
In a related announcement, the US Trade and Development Agency confirmed funding for “new early-stage project planning activities to help additional clean energy projects reach financial close”. Projects will include a 50 MW solar photovoltaic plant in Nigeria, a 2 MW ‘mini-grid solution’ developed in Tanzania, “as well as a market assessment of battery storage technologies that can enable renewable generation continent-wide and provide a clean energy technical adviser for the Development Bank of Southern Africa”, the White House said.
According to the White House, “Power Africa’s initial $7bn commitment has already mobilised more than $20bn in private sector commitments to invest in power generation and distribution across sub-Saharan Africa”. “Power Africa’s public sector partners, including the African Development Bank, the World Bank Group and the government of Sweden have collectively committed an additional $9bn in support of Power Africa.”
Obama said in Ethiopia: “Instead of just sending aid to build power plants, our Power Africa initiative is mobilising billions of dollars in investments from governments and businesses to reduce the number of Africans living without electricity. By harnessing the wind and sun, your vast geothermal energy and rivers for hydropower, you can turn this climate threat into an economic opportunity.”
Meanwhile, Obama told the 2015 Global Entrepreneurship Summit in Nairobi that Kenya was “setting an important example” for entrepreneurs in Africa. “Today, Kenya is the largest economy in East Africa. High-speed broadband and mobile connectivity are on the rise, unleashing the entrepreneurial spirit of even more Kenyans. Every day around the world, millions of people send and save money with M-Pesa – and it's a great idea that started here in Kenya.”
Obama said a goal of generating $1bn in new investment for emerging entrepreneurs around the world had been exceeded over the past year. As part of that investment, Obama said OPIC would be contributing $100 million to support Goldman Sachs’ 10,000 Women initiative, “making more capital available to women-owned enterprises around the world”.
Last month, the US African Growth and Opportunity Act, which provides for increased trade and investment between the US and Africa, was renewed for a further 10 years when it was signed into law by Obama.
